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SARS Focuses On Tax Practitioners' Compliance

Thursday, July 19, 2012

In his address on the occasion of the 30th anniversary of the South African Institute for Professional Accountants (SAIPA), the Commissioner of the South African Revenue Service (SARS), Oupa Magashula, talked of the actions being taken to improve compliance by tax practitioners.

He confirmed that, while accounting professionals, such as SAIPA’s members, have a key role to play in advising on tax and accounting risks, there are also high levels of non-compliance amongst tax practitioners.

Magashula recalled that the South African Minister of Finance, Pravin Gordhan, in his Budget Speech, had disclosed that an analysis of compliance among the country’s 35,000 tax advisors has shown that, in their personal capacity, they are indebted to SARS to the tune of ZAR260m (USD31.7m), whilst at the same time they have 18,000 outstanding returns.

Non-compliance by trusts and companies is, he added, also a key area of concern for SARS, and it has been determined that tax practitioners could be linked to over 107,600 companies and trusts.

SARS has clearly emphasized the significance of the tax advisory sector as a key focus area in its five-year compliance programme that was launched earlier this year. It is planned to focus, in that programme, on improving the personal compliance levels of practitioners that are non-compliant, improving the registration process of practitioners,and identifying practitioners that have been assisting their clients to be non-compliant.

As to the first focus area, Magashula said that SARS’s intention to fast-track the cases for non-compliant practitioners over those of normal taxpayers, while, with regard to the second focus area, the new Tax Administration Act has been promulgated and draft legislation has been introduced providing a new model for regulating the tax profession.

The former he called “a robust piece of legislation that both protects the rights of honest taxpayers and provides SARS with the tools to combat non-compliance,” while the latter will deal with the fact that “only about 55% of practitioners registered with SARS are registered with any professional body leaving nearly half with no oversight or accountability”. He added that “we are mindful that those without affiliation tend to be less compliant in their own tax affairs according to our statistics”.

The regulation of tax practitioners will be strengthened over two phases, with the first phase being their compulsory registration with a recognized controlling body such as SAIPA. The second phase will be the establishment of an independent regulatory board for tax practitioners. That phase will begin with a review of the success, or otherwise, of the first phase eighteen months after its implementation.

SARS will review the minimum qualifications and experience requirements, continuing professional education requirements, code of ethics and conduct and disciplinary code and procedures of a professional association seeking recognition. To ensure sustainability and credibility, those associations should have at least 1,000 members, either upon application or within a year to cater for new associations.

In addition, the range of misconduct that may be reported by SARS to a recognized controlling body will be expanded to cover additional tax specific misconduct, while, in order to deal with the cases where a professional association lacks the capacity to take effective disciplinary action, provision will be made for the Minister to appoint a panel of retired judges or persons of similar stature and competence to hear cases of misconduct reported by SARS on behalf of the association.

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The Report

Offshore Trusts Guide: Introduction

The History of Offshore Trusts
Development of Professional Competence in the Jurisdictions
What Future for the Trust?
The New Age of Transparency
The Swiss Association of Trust Companies
The Society of Trusts and Estates Practitioners

Offshore Trusts Guide: Jurisdictions

Bahamas

Bahamas: Legal Framework and Formation Rules and Fees
Bahamas: 2006 Private Trust Companies Legislation

Barbados

Barbados: Legal Framework and Formation Rules and Fees
Barbados: Supervisory and Licensing Regime and Fees

Bermuda

Bermuda: Legal Framework and Formation Rules and Fees
Bermuda: Supervisory and Licensing Regime and Fees

British Virgin Islands

British Virgin Islands: Legal Framework and Formation Rules and Fees
British Virgin Islands: Special Trusts Act 2003
British Virgin Islands: The Trustee Act 2003
British Virgin Islands: :Supervisory and Licensing Regime and Fees
British Virgin Islands: New Laws on Private Trust Companies
British Virgin Islands: New Private Trust Company Regulations

Cayman Islands

Cayman Islands: Legal Framework and Formation Rules and Fees
Cayman Islands: Supervisory and Licensing Regime and Fees

Cook Islands

Cook Islands: Legal Framework and Formation Rules and Fees
Cook Islands: Supervisory and Licensing Regime and Fees

Cyprus

Cyprus: Legal Framework and Formation Rules and Fees
Cyprus: Supervision, Licensing and Tax

Gibraltar

Gibraltar: Legal Framework and Formation Rules and Fees
Gibraltar: Legislation, Regulation and Supervision

Guernsey

Guernsey: Legal Framework and Formation Rules and Fees
Guernsey: Trusts Law 2007

Isle of Man

Isle of Man: Legal Framework and Formation Rules and Fees
Isle of Man: Supervisory and Licensing Regime
Isle of Man: Uses Clients and Tax Treatment

Jersey

Jersey: Legal Framework and Formation Rules and Fees
Jersey: Supervisory and Licensing Regime
Jersey: Trusts Amendment Act 2006
Jersey: Foundations

Liechtenstein

Liechtenstein: Legal Framework and Formation Rules and Fees
Liechtenstein: Regulation Supervision and Transparency
Liechtenstein: Characteristics of Liechtenstein Trusts
Liechtenstein: Foundations

Madeira

Madeira: Legal Framework and Formation Rules and Fees

Malta

Malta: Legal Framework and Formation Rules and Fees
Malta: The Trust and Trustees Act 2004

Mauritius

Mauritius: Legal Framework and Formation Rules and Fees
Mauritius: Characteristics of the 2001 Trusts Act
Mauritius: Additional Provisions of the 2001 Trusts Act
Mauritius: Tax Treatment

Monaco

Monaco: Legal Framework and Formation Rules and Fees

Nevis

Nevis: Legal Framework and Formation Rules and Fees

Panama

Panama: Legal Framework and Formation Rules and Fees
Panama: Requirements for Acting as Trust Company in Panama

Seychelles

Seychelles: Legal Framework and Formation Rules and Fees

Turks & Caicos

Turks & Caicos: Legal Framework and Formation Rules and Fees
Turks & Caicos: The Voidable Dispositions Ordinance

Vanuatu

Vanuatu Legal Framework and Formation Rules and Fees




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